GOSHEN BOARD OF FINANCE
MINUTES SPECIAL MEETING 10/14/2009
CALL TO ORDER: Chairman Allan D. Walker called the meeting to order at 7:30 P.M.
ATTENDANCE: Allan D. Walker, Donald Pardon, Scott Tillmann, John D. Garvey and Alternate Wilrose Duquette. Ned Bixler arrived at 7:37 P.M. and James Korner arrived at 7:42 P.M. Absent, Alternate Dexter Kinsella. Also present, First Selectman Robert Valentine and Auditor Mike Zemaitis.
SEATING OF ALTERNATE: A MOTION WAS MADE BY Donald Pardon seconded by Scott Tillmann to seat alternate Wilrose Duquette as a regular member. No discussion, SO VOTED.
PURPOSE OF MEETING: Finance Board review of the Full Draft Audit Report for the Fiscal Year ending June 30, 2009. Chairman Allan Walker turned the meeting over to Auditor Mike Zemaitis to present said audit report to the Board. A Full draft copy of the Financial Statements was presented to all who were present. Under opening comments, Mike Zemaitis noted that he had a good report and that in his audit of the financial records of the Town for Fiscal Year ending 6/30/3009 he found no corrective action to be taken or items of concern to report to the Board.
Noted as follows under the draft report: Page 3 – Town of Goshen Management Discussion and Analysis prepared by Town Officials gives a summary of the Town Financial statements for said fiscal year. Two Financial Highlights for 2008/2009 were the year end Net Assets for the Town of $6,762,736 and fund balances of $3,418,010 with much of that amount attributed to the general fund. Approximately $1,985,456 is available for spending under the unreserved fund balance. The unreserved fund balance for the general fund for 6/30/09 was $1,502,742 or 16.5% of total general fund expenditures. Noted were the two sets of Financials one, the Government Wide Financials which give a broad overview of the Goshen’s finances while the Fund Financials which provide the financial information relative to revenues, expenditures
and changes in fund balances.
Page 5: Highlights of Net Assets the economic downturn effect showed the resulting decrease in Real Estate Conveyances, Recording Fees and Building Officials totaling $37,862 a decrease of $88,276 in interest income and an increase in utility & Telephone cost of $3,150.
Page 6: Showed the changes in the net assets of the Town. Net Assets 7/1/09 were $5,920,510. For 7/1/09 net assets were $6,762,736.
Page 7: Provided charts that relate to the financials on pages 5 & 6, Said pie chart showed that 90% town Revenue is generated by Property Taxes while approximately 70% of the expenses relate to education.
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Pages 8 & 9: Page 8 gives an analysis of the funds. The report showed combined ending fund balances of $3,418,010, a decrease of $38,707 compared to prior year. It was noted that 58% of the total amount constitutes 58% of unreserved fund balance, leaving the Town was in a solid financial position to hold the mill rate at 14.4 mills for 2009/2010. Page 9, Highlighted the fact that of the $545,855 budgeted to be used out of fund balance due the spending freeze only $218,056 of the general fund balance was used. The fund balance at the end of fiscal year 6/30/09 was $2, 151,616.99, of which $648,874 was designated to subsequent year expenditures. The fund balance for the previous year was $2,369,762. Page 9 also addressed capital asset and debt administration noting that the Town net pension obligation remains
constant.
Page 10: Listed the Economic Factors and their impact on next year’s budgets and rates and the action taken in order to address the budgetary concerns.
Page 11 and Page 12: These pages are that are considered under the Audit as the Town Government Wide Financial Statements. These statements represent a full accrual basis of accounting, both current and non-current assets and liabilities of the Town. Discussed briefly was the net assets and the means used in the determination of value of the fixed assets. Under the State 2004 GASBY 43 Program the Town had the option of using the historical value or the value going forward and the Town opted to use values going forward. Questioned was the Restricted for housing study amount of $7,128. Robert Valentine explained that it is an incentive housing study with $43,000 in grant money provided for the study of workforce housing. Auditor Mike Zemaitis noted that a negative side of the Government Wide Financials is the use of a lot of
different information from a lot of different funds and bring it all together to make it understandable for all parties. The statement of activities on page 12 is the Government wide statement of Revenues and expenses with the focus on expenses and the funding sources that help to offset the functional areas of expense. Said Government expenses showed Education expense of (6,724,961) and Public Works at (1,289,926) as the two major expenses and the statement of activities show the revenue that directly attribute to a function of those areas or offset the cost of that area. Said report showed that the Town needed $ (9,532,631) in funding to pay for the functional expenses of the Town. It was noted that the $74,735 under Donated Capital Assets was for the transfer of a parcel of land from a private owner to the Town for the Tyler Lake Dam Project.
Page 13: The Balance Sheet for the Governmental Funds shows where the Town is on current resources , where the funds were at year end and what the revenue were for those funds and what the cost were during the fiscal year. Year end fund balances, General Fund $2,151,616., Capital & Non- Recurring, $647,526 and a balance of $639,686.00 in all other funds of the Town. The reconciliation schedule helps to explain the two sets of financials. How the Town
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has a Balance Sheet of $3,418,010 in Fund Balances while there is there is $6,762,736. In total Net Assets. Also noted were the deferred property taxes, interest and lien fees and the Long-term liabilities (pensions) it was noted that the Town has no Bonded Debt.
Page 14: Fund Revenue and Expenditures showed Property Taxes of $8,642,715. being the major source of revenue with $353,293. coming in under intergovernmental Grants. Noted was the ($218,056.) decrease in fund balances. The report showed the Year end fund balances of $2,151,616. In the General Fund, $647,526. in Capital & Non-recurring and $618,868
Other Funds for a Total Funds Balance of $3,418,010.
Page 14 & 15: Statement of Revenues, Expenditures and Changes in Fund Balances helps to explain the changes in the Governmental Funds.
Page 16: Shows the Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual-General Fund. Highlighted under that report showed Tax Collection remaining strong, with a positive variance of $120,793 in taxes. Also noted was the negative variance of ($88,276.) in investment income and ($37,304.) in Departmental Fees Income. The expenditure side showed the effect of the spending freeze with the Town coming in with a $333,681 positive number. Noted was the addition to the report was the accounting for other financing sources (uses) which showed the use of fund balance, transfers in and transfers out. Under the 2008/2009 budget $579,855 was to be used from surplus. The actual used from surplus was $218,056. Leaving a positive variance of ($361,799.) against the budget.
Page 33: The Auditor moved to page 33 of the report which gives in detail the schedule of Revenues and other financing Sources under Budget and Actual General Fund. Said detail report made clear how the state of the economy affected the Revenue coming in under the Departmental Fees line items as well as the interest income.
Pages 34 & 35: Schedule of Expenditures and Other Financing Uses showed that many departments did well against the budget. Noted was the Employee Benefits line item under budget number of $59,240. It was explained that this was due in part to the fact was due to Public Works staffing and the conservative numbers used for employee benefits used under the budget process. Also noted and explained was the $30,293. For Sanitation which was the CRRA due to the lowering of the tipping fees.
Page 36: Combined Balance Sheet – Nonmajor Governmental Funds showed the year end balances under the various nonmajor funds. Noted and explained was $220,272 for Town Aid Roads, the $234,116. for Land Acquisition. It was also noted that the Down Dog Fund now is operating under a positive fund balance of $5,766 and the addition of a Capital Project Fund for the State financed cost of the Tyler Lake Project.
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Page 37: Detailed the permanent funds of the Town. These are permanent trust funds that are held to provide income to help offset town cost. Noted was the $103,854 yearend balance under the East Street Cemetery Fund and the fact approximately $95,000 of that amount is held to produce income and is not to be spent.
Page 38 & 39: Combined Statement of Revenues, Expenditures and Changes in Fund Balances of the Non major Governmental Funds and how they did for 2008/2009. Noted were the transactions under the Town Aid Roads Fund, the Land Acquisition Fund, the incentive housing Study Fund. Noted and explained was the $21,816.00 that was transferred out to the Capital Non-recurring fund of what was known as the Goshen Public Library Fund. It was noted that these funds are invested in securities and the report reflects the effect the economy had on the net depreciation of some of the funds.
Page 40: Combining Statement of Fiduciary Net Assets – Fiduciary Funds – Noted and explained were the Pension Trust Funds and the Agency Fund which is the Parks and Recreation Activities. It was noted that the current employees are under what is known as a Defined Contribution Plan and the current balance in that fund is $346,234. Page 41 showed the net investment depreciation of $(89,398.) in the defined contributions plan. It was noted that the Town provides advisory assistance to the Employees relative to the investment of their pension funds but the final investment decision as to how their individual funds are invested is made by the employee.
Page 42: Schedule of Statement of Debt Limitation which is required by Connecticut General Statutes Section 7.374(B). Said schedule shows the reader just how much debt the Town could legally incur based on State Statutes. It was noted again that the Town at year end has no direct debt. The Town does however share in the Region 6 School District dept which share is 43.73% or $2,306,758.
Page 43: Report of the Tax Collector – Said report showed at the beginning of the fiscal year uncollected taxes of $100,004. With a year- end uncollected taxes number of $90.737.00. Mike Zemaitis noted the strong collection rate for the Town and the he had not seen a drop in the delinquent tax collection rate for any other area towns.
Pages 19 through 32 are foot notes that detail significant accounting policies. They provide information as to how the financials are presented, the way revenues and expenses are measured in the Governmental Wide and Fund Financial Statements. Page 24 explains the certain differences between the governmental fund statement of revenues, expenditures and changes in fund balances and the government-wide statement of activities. Page 25 in a foot-note of Cash, Cash Equivalents and Investments – Noted was the SWEEP and STIFF Accounts being used by the Town for the investment of Town which are abel to get back better returns as
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Being able to place the funds in secured deposits. Page 26 gives a schedule of investments for year-end. With the exception of the Cemetery and Pension Funds, all other funds are invested in CD’s. Town Funds are not invested in stocks and bonds. Noted were the Credit Risk and the Custodial Credit Risk on Deposits noting that the deposit of public funds is controlled by the CT General Statutes (Section 7-402). It was noted that as of 6/30/09 a minimum of $112,028 of the Town’s deposits was collateralized in accordance wit the CT General State Statutes, $1,007,380 was insured by FDIC leaving a balance of deposits of $25,475.00 uninsured and uncollateralized at year end, noting that figure can change on a day to day basis.
Page 26, explains the custodial Credit Risk relative to the Town being able to recover the value of its investment or collateral securities in an event of failure of the holder of said funds.
Page 28: Noted are the interfund Receivables, Payables and Transfers tractions of the Town General Fund, Non-major Funds and Capital and Non=recurring. Also noted was the Capital asset activity for6/30/09
Page 29 – 32: Those pages note the Pension Liabilities and the information on Pension Plans and Schedule. Noted on Page 32 were the net year-end assets available for benefits under the plan in the amount of $346,234 with $322,036 of that amount being vested benefits under the defined pension plan. It was noted that the employees cannot withdraw those funds until they reach 59 ½ but they do have the right under the plan to transfer funds to other investment pension plans. It was noted the Town Contribution to the plan for 08/09 was $26,120 with $16,947 being funded from forfeited plan accounts for a total of $43,067 going in as contributions to the employee pension accounts.
Discussed briefly was the negative side if any of having a healthy fund balance. Mike Zemaitis stated that he did not know of any negative significance to a Town for having a healthy fund balance. Discussed was the upcoming consideration being by Region 6 to refinance and the current bond ration of the three towns and its bearing on being able to get a lower interest rate. Even though the Town has no debt at this time, there is the Region 6 debt and it is important that the Town keep a healthy fund balance.
There was no further discussion on the Final Draft 6/30/06 Audit Report. The final Draft remained to be signed by the Town Officials and given to the Fiscal Office for printing under the Town Report.
Brought to the attention of the Board was correspondence from Region 6 inviting Finance Board members to attend a meeting on the 2009/2010 Budget. The meeting would be held on Wednesday, the 15th of Oct. at 7:00 P.M. in the District Office at Wamogo Regional High School. Allan Walker noted that he would be attending the meeting.
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There was no other business proper to come before said meeting. A MOTION TOADJOURN WAS MADE BY James Korner seconded by Ned Bixler. The meeting adjourned at 8:38 P.M.
Respectfully submitted,
GOSHEN BOARD OF FINANCE
Joan M. Lang, Board Clerk
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